China Mainland stock index rises to record for 3rd Day

China Mainland stock index rises to record for 3rd Day

SHANGHAI, May 23 -- Chinese mainland key stock index climbed to a third straight record after a newspaper said the government doesn't plan to increase the stock transaction fee. Some of the biggest companies including China Vanke Co led the gain.


"Any news concerning the change in stock transaction fee will have an impact with the market at this record high," said Fan Dizhao, who helps manage the equivalent of US$1.8 billion at Guotai Asset Management Co. in Shanghai. "Today's denial news should be giving a lift in the market."


Shanghai's foreign-currency shares fell for a second day amid concern that recent gains more than reflected the prospect for earnings growth and their merger with yuan shares.


The benchmark CSI 300 Index, which tracks yuan-denominated A shares listed on two domestic exchanges, added 68.46, or 1.8 percent, to close at 3,938.95 today, rising to a high for a third straight day.


The Shanghai Composite Index, which tracks the bigger of domestic stock exchanges, added 1.5 percent to 4,173.71. The Shenzhen Composite Index, which covers the smaller one, gained 2.1 percent to 1,223.98.


The government won't increase the stock to 0.3 percent of the value of the transaction from 0.1 percent as some investors had speculated, according the Shanghai Securities News, which cited the state taxation administration.


China has changed the fee six times since share trading started in 1990. The last time the government adjusted the fee was in January 2005, halving it to 0.1 percent, according to the newspaper, which is affiliated with the Xinhua news agency.


China Vanke, the nation's biggest property developer, gained 0.85 yuan (11 US cents), or 4.9 percent, to 18.25 yuan. China Merchants Bank Co, the nation's third-biggest publicly traded lender, added 0.55 yuan, or 2.7 percent, to 21.21 yuan. Shenergy Co, the country's third-largest power producer by market value, rose 1.39 yuan, or 7.4 percent, to 20.21 yuan.


The CSI 300 has jumped about 90 percent so far this year after more than doubling in 2006, making it the most expensive market in the Asia-Pacific region and adding to concerns the regulators will take measures to prevent a bubble.


Sany Heavy Industry Co, China's biggest maker of machinery for handling concrete jumped 2.47 yuan, or 7.2 percent, to 36.71 yuan. The company said the securities regulator approved an audit, bringing the company a step closer to getting permission to proceed with a private share sale.


The company will wait for further approval from the China Securities Regulatory Commission to sell the shares, Sany Heavy said today.


Baoshan Steel, China's biggest steelmaker, dropped 0.12 yuan, or 1 percent, to 12.73 yuan. The company will keep the price of hot- rolled products, used in buildings, unchanged at 3,942 yuan a ton, excluding tax, said Baoshan Steel yesterday. Cold-rolled product prices will also remain unchanged from the second quarter.


"That Baoshan kept prices unchanged signals to us demand for steel products may slow against supply, which is obviously bearish for steelmakers," said Fan at Guotai Asset Management.


Other steelmakers also fell. Angang Steel, the fourth-largest, fell 0.30 yuan, or 1.5 percent, to 19.35 yuan.


China also on May 21 said it will impose an export tariff of as much as 10 percent on some steel products from June 1. The government has been trying to rein in economic growth, and curb a trade surplus.


Shanghai's index of so-called B shares fell 17.12, or 5 percent to 323.36, following the biggest drop in three months yesterday. The gauge for Shenzhen B shares rose 0.9 percent, to 743.97.


China's B shares have gained since March amid speculation that the stocks will be merged with the more expensive, yuan-denominated A shares.


The B shares, which can be bought and sold only by domestic individuals and overseas investors, are traded in US dollars in Shanghai and Hong Kong dollars in Shenzhen.


Zhejiang Southeast Electric Power Co., an electric power generator and distributor, plunged US$0.15, or 9.6 percent, to US$1.37. Jiangsu Xincheng Real Estate Co, a local property developer, fell US$0.38, or the daily cap of 10 percent, to US$3.37. Dazhong Transportation (Group) Co, which provides taxi service in Shanghai, lost US$0.14, or 7.1 percent, to US$1.84.


The following stocks rose or fell and the stock symbols are in brackets after companies' names.


Huaneng Power International Inc, the listed unit of China's largest power group, climbed 0.71 yuan, or 5.5 percent, to 13.69 yuan. Parent China Huaneng Group and China National Nuclear Corp agreed to develop four nuclear units of 650 megawatts each on the southern island of Hainan. The two parties signed a cooperation agreement yesterday, the state-owned Assets Supervision and Administration Commission said yesterday.


Shanghai Pudong Development Bank Co, the Chinese partner of Citigroup Inc, added 0.15 yuan, or 0.5 percent, to 27.70 yuan. The company said it plans to raise about 8 billion yuan selling shares this year to bolster capital for expansion. The bank may use the local stock market or tap investors in overseas markets including Hong Kong and Frankfurt, Chairman Jin Yun said at a shareholder meeting yesterday.